Mining Ltd commences operations on 1st January 2018. During 2018, Mining Ltd explores three areas and incurs the following costs:

Exploration and Evaluation Expenditure ( $M)

Labasa 40

Tavua 20

Ba 35

In 2019 Oil is discovered at the Labasa site.Tavua Site is abandoned. Ba Site has not yet reached a stage that permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in the area of interest are continuing. In relation to the exploration and evaluation expenditures incurred at Labasa site and the Ba site, 75% of the expenditures relate to property, plant and equipment and the balance relates to intangible assets.

In 2019, development costs of $30 million are incurred at Ba site (to be written off on a production basis). $21 million of this expenditure relates to property, plant and equipment, and the balance relates to intangible assets. Labasa site is estimated to have 10,000,000 barrels. The current sale price is $28 per barrel. Three million barrels are extracted at a production cost of $2.85 million and 2.1 million barrels are sold.

Required

a)Prepare the journal entries using The full - cost method.Narrations already provided,just fill in the figures.

A) FULL - COST METHOD

2013

Dr Exploration and evaluation assets

Cr Cash, payables, accumulated depreciation, etc.

2014

Dr Assets under construction - property, plant and equipment

Dr Assets under construction - intangible mineral assets

Cr Exploration and evaluation assets

Dr

Assets under construction - property, plant and equipment

Assets under construction - intangible mineral assets

Cr

Cash/payables

Dr Property, plant and equipment

Dr Intangible mineral assets

Cr Assets under construction - property, plant and equipment

Cr Assets under construction - intangible mineral assets

Dr Inventory of crude oil

Cr Accumulated depreciation - property, plant and equipment

Cr Accumulated depreciation - intangible mineral assets

Dr Inventory of crude oil

Cr Cash, payables, accumulated depreciation, etc.

Dr Cash/receivables

Cr Sales revenue

Dr Cost of goods sold

Cr Inventory of crude oil